ASIC information sheet on ICOs

The Australian Securities and Investments Commission announced on September 28, 2017 the release of information sheet 225 on ICOs. The sheet considers that the legal status of an ICO is dependent of the circumstances, such as how the ICO is structured and operated, and the rights attached to the token offered through the ICO. Applicable status include :

A managed investment scheme (MIS) as defined within the Corporations Act, when people are pooling assets in order to obtain an interest for a common enterprise with no control over the operation of the scheme except occasional voting rights. If an MIS is being used there are a range of disclosure, registration and licensing obligations under the Corporations Act.

An offer of share when the token is issued to fund a company or an undertaking that looks like a company. In that case the law mandates a prospectus with all necessary information. Nevertheless, ASIC warns investors that in an IPO investors can withdraw their money in case of incomplete, misleading or deceptive statements, but no such protection exists for an ICO

An offer of a derivative

A trading on a financial market

Crowd sourced funding

non-cash payment facility

Moreover the ASIC warns issuers that Australian law prohibits misleading or deceptive conduct in a range of circumstances, including in trade or commerce, in connection with financial services, and in relation to a financial product.